Katrina May Curb Economic Growth Into 2006

a) Identification of the article:

Title: Katrina may curb economic growth into 2006

Author: Associated Press

Publisher:msnbc

Date: September 5, 2005

b) Brief summary of the article:

The article focuses on Hurricane Katrina, not only the damages that it caused in New Orleans and Mississippi, but the way it will be felt across the world. Katrina's damage will be felt across the global economy in ways that will set back growth well into 2006. The article also mentions several countries whose economy was slowed down due to Katrina. In the United States oil prices spiked and is unlikely to return to the levels of 2004.

As mentioned in the article, the effects that this hurricane has caused are world wide. Germany's and Switzerland's gasoline prices hit a record high. The article also states that surging oil prices have also sparked an economic crisis in Indonesia. According to the article, Chinese economy has also suffered, even though its economy is growing at a rate of 9.5 percent. Thailand's and Hong Kong's economy growth will also encounter problems.

c) Main data of the article:

The article states how Hurricane Katrina became the worlds economy biggest enemy and how it may take time to recuperate. Many of the world's greatest economies suffered due to high oil prices. But, some of these countries not only grieved due to the oil prices sky rocking, but suffered an increase in interest rates, like in the case of Indonesia, and in Thailand many Thai fishermen have also felt the aftermath of Hurricane Katrina.

d) Main arguments of the article:

I. The article gave several economists opinions.

a. "While the storm's impact was most felt in the United States, it also sent fuel costs higher around the globe, squeezing consumers in Europe and Asia and hurting everyone from truckers to fishermen to airlines." said Mark Vitner, senior economist at Wachovia Securities in Charlotte, N.C.

b. The article stated that Hurricane Katrina caused a cutback in travel over the Labor Day weekend in the United States. According to the article, economists point out a drop in consumer confidence is likely. "There's a psychological impact. Consumers aren't in a festive mood," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.

c. The federal government has pledged billions of dollars of rebuilding funds, but it will take months for the basic recovery efforts to be completed before the money for reconstruction starts flowing. "This is such a different type of disaster than we're accustomed to dealing with," Vitner said.

The full extent of Hurricane Katrina's damage to oil and natural gas infrastructures in the Gulf of Mexico are not yet known, but it is expected to be weeks, if not longer, before output is back to normal. The same goes for the facilities that refine